2021 Financial Review & Looking Forward To 2022

In the last Mortgages, Money and More podcast before Christmas, Craig and Jason look back over the year and what’s coming up in 2022.

Taking stock at this point of the year

It’s a good time to reflect and look back  – it’s been a very busy year in terms of topics to cover. And when we get towards the end of the year, it’s almost a relief to get to this point  and start feeling some optimism looking forward to 2022.

We can’t help but mention COVID – but it’s something we’re now getting used to living with. But let’s go back in terms of highlights and reflections on 2021.

A good year for CS Financial Group

From a business perspective, then 2021 will be up there. And it’s a year I’ll never forget because it’s been awesome. And I’m just hoping everybody else has a similar sort of review of 2021.

But where has the year gone? It’s gone so quickly. And it’s not until you actually reflect back at our first podcast of the year, and the predictions we made, that you take stock.

The housing market has been the big driver from a business point of view this year. Back at the beginning of the year we were taking bets on what would change, but I don’t think we ever thought we’d see growth like this. I was looking at the house price index and the annual increase in house prices has been 10.2%. In my area, there are houses coming on the market and I can’t believe the prices they are looking for.

House prices in 2022

House price rises come in cycles, and I think there must be another good few years of potential increases ahead. I think we’ll see that get even stronger.

I’m not quite sure we’re going to see a 10% growth again – it might be a little bit more conservative than that, but there’s still a very big growth trend in the housing market. It’s difficult for First Time Buyers, but it is very much a seller’s market right now.

The impact of inflation

Inflation is seeing a big rise, and so is the consumer price index. This is bound to happen off the back of what we’ve just gone through, and all the stimuli put in place to help support the economy through the pandemic.

Certainly as of the end of November inflation was at 4.6%, which is approaching those scary heights again and the pundits are saying that’s going to go up even higher.

It’s obviously down to the rise in fuel prices. Gas and electricity prices have gone up so much – electricity is up nearly 19% year on year and gas up over 28%.

It’s not just gas and electricity being affected. I buy logs from a wood stall. I was paying £80 for a big bag of them last year, and they’re now £105. So there’s inflation for you.

If you add into the mix that house prices are rising at 10.2%, that will only add to these inflation figures – which are already ahead of people’s forecasts.

Economic recovery

The encouraging thing is that in October the economy returned to pre-pandemic levels. It was great to hear that, from an economic point of view, we have weathered the storm. So that’s really encouraging for the months ahead.

On many previous podcasts we’ve talked about where you should be investing and diversifying and making sure not too much of your wealth is tied up in cash. If you have a large amount of cash savings, then high inflation is putting that cash at risk.

But on the other hand, the next thing we’re going to see is the Bank of England raising interest rates. And that’s going to hedge against inflation.

Inflation will accelerate at a higher rate and we’ll potentially see interest rates increase. And this goes along with what we’ve always said about the basic principles – which is to make sure that your money is invested somewhere that’s giving you the greatest potential, irrespective of what the economy is doing.

The positives of the pandemic

Well. we have to mention Captain Sir Tom Moore. Although he sadly passed away this year, he managed to raise over £32 million for the NHS by walking round his garden on his 100th birthday.

From my own personal point of view, remote working has been a big revolution in the past 18 months. Everybody I come across these days is no longer commuting to the office and this is going to be business as usual, working from home.

With new variants coming in, even though so many people are vaccinated and boosted, I can’t see that changing in the near future. We just have to learn to deal with COVID as an industry and as people – we’ve got to get used to it.

But people do miss the social side of working in an office. We’ve got to be aware of the mental health impact and the need for support from people around you.

Impact on commercial property

We were in Manchester last month in a business hub. And we were surrounded by offices, but there were no lights on any of them. They surely can’t continue to pay the rents – and all the restaurants in these places are also empty. There’s still a lot of things that will potentially change in the months to come.

So while people are remote working from a luxury log cabin at the bottom of your garden, these commercial areas will change a lot too over the coming years.

Financial advice in 2022

I’m very conscientious now about wearing a mask and sanitising my hands – it’s second nature now, because I’m starting to go out and see a lot more clients at their homes. I suspect I’m going to do a lot more of that in 2022, too, depending on what the rules and regulations are.

Our job is all about trust, purpose, and building relationships with clients. You can build trust a lot quicker if you’re seeing somebody face to face.

It’s about being sensible and making sure that when you knock on somebody’s door, you reassure them that you’ve got no symptoms and have done a test and ask the same of them. That way we can try and get back to some normality in 2022.

Hot topics for 2022

There are some big things we’re going to talk about on the podcast next year. We’ve got to talk about the government looking at increasing the state pension age. We’ve got the pension dashboard, which I’m looking forward to coming through in 2022.

From a business point of view, the things happening in the financial advice world are very positive, especially with regard to new technology.

We might also be talking more about COP26 and what’s happened since, because that’s very important to me. We need to keep looking at climate change, green mortgages and other initiatives.

Investments are going to change. I’m excited to see how actively managed funds are going to start changing and what they’re investing in. We’re really looking forward to that.

Let’s put money on the fact we will be here doing this again in twelve months time and saying, 2022 has been the best year yet!

Merry Christmas, best wishes for the New Year and we look forward to helping you with hints, tips, ideas and thoughts in 2022.